Chief executive’s view: Our low-carbon future

Removing the route to market for least-cost renewables risks impacting on customer bills.

In the third quarter of 2016, the UK achieved a clean energy milestone with 50 per cent of electricity demand met by low carbon sources. That’s up from 45.3 per cent for the same period in 2015. The rise was driven by new windfarms and solar farms being connected to the grid and several major coal power stations closing as a major technological shift takes place in our industry.

Last week, we saw another milestone as Britain hit a renewables peak midday power demand record of 19.3GW out of a total of 34.5GW. This shows how energy companies are embracing the opportunity to deliver the affordable, secure and clean energy that consumers demand.

Overall the energy sector has reduced its emissions by 54 per cent on 1990 levels. This is a significant contribution to achieving our national climate change targets.

There are many ways in which the sector has innovated and used technology to develop new and progressive energy solutions, including co-location. For example, integrating battery storage systems into offshore windfarms to deliver frequency response to aid National Grid in managing grid stability.

Innovation has been used to convert coal-fired units to biomass, of which there are now a number of examples. Furthermore, flexibility of our energy system is also a crucial component of supporting and managing the increased proportion of our power that comes from clean and intermittent generation.

Across our membership, there are many other examples of best practice and innovation at work as the energy sector embraces the opportunity of low-carbon growth.

In recent years investment and development in the renewables sector, and its supply chain, has grown significantly, with £52 billion invested in renewables projects since 2010 according to figures from the Department for Business, Environment and Industrial Strategy. However, the recent removal of a route to market for the least cost renewable and low-carbon energy sources risks impacting on customer bills and the progress made on decarbonisation.

We now need reliable policies that continue to encourage investment and an industrial strategy that promotes low-carbon growth and supports the development of sector deals. This will enable the industry to go further and faster in developing new low-carbon technologies at least cost to the consumer. This will benefit domestic projects but also provide companies and developers with the opportunity to export services and products to international markets, demonstrating our global leadership in energy, essential in a post-Brexit world.

We must ensure there is a route to market for all technologies. Investment may contract in the absence of stable policy and increasing political certainty.

We hope the new government will move quickly to provide a stable, long-term policy framework and to allow all forms of low-carbon generation to compete in future contract for difference allocation rounds. Collectively this will give the positive investment signal the industry requires. As we construct a more flexible, efficient grid, we must also consider power, heat and transport as a whole system in our continuing journey to decarbonise.